The region is doing better than most, but it needs to work harder at aligning workers’ skills with economic opportunities.
By several measures, metropolitan Baltimore’s economy is doing better than fine.
In 2010, median household income was nearly $15,000 higher than the national average, and during the last decade, real incomes grew even as they shrank nationally. Metro employment increased, while it declined across the country, and when the economy went south, the region’s unemployment rate remained lower than that of most if its metropolitan peers.
But as legitimately rosy as these numbers are, they mask — as averages will do — the steep opportunity challenges facing many of the region’s residents. While only about 10 percent of metro-area residents would be considered poor by the standard measures, nearly a quarter are low-income, meaning they are part of a family whose yearly income is below 200 percent of the federal poverty line, or less than $47,000 for a family of four.
The problem is that for years, the Baltimore region has been creating too few good-paying jobs that too few low-income people have the skills and other capacities to access. In fact, three-quarters of our area’s low-income workers are employed in just a handful of industries, such as health care and educational services, retail, and accommodation and food services. These industries don’t pay uniformly low wages, but they include large numbers of low-wage occupations.
The fact that low-income people are concentrated in low-paying jobs is not news. However, we should be more than a little concerned that it is the lowest-wage industries in the metro area that have been growing the fastest over the past few decades. What’s worse, average annual wages in some of these industries — such as food service and drinking establishments and social assistance — have actually dropped. The opposite is true for well-paying sectors like manufacturing, which have seen their job numbers plummet even as wages have grown.
So what can we do to grow an economy that provides greater opportunities for greater numbers of our residents? This Thursday, we at the Brookings Institution are releasing a new study, “Building From Strength: Creating Opportunity in Greater Baltimore’s Next Economy,” that focuses on the creation of quality jobs and preparing our workforce to fill them.
As the report highlights, the Baltimore metro area has an awful lot of good things going for it, including an enviable network of colleges and universities; several world-class hospital systems; close proximity to the nation’s capital; and, importantly, sophisticated firms, skilled talent and formidable research capacity. These assets should allow us to grow and excel in areas like manufacturing, bioscience, information technology, transportation and logistics, and the “clean” economy — all sectors that, compared to the metro economy as a whole, have a greater share of workers earning a middle-income wage or better without having completed a four-year degree.
But we aren’t anywhere near taking full advantage of all our strengths.
To do so, we need to be strategic and intentional. We need to build a stronger export economy and provide greater support for innovation and entrepreneurship in all industries. We should do more to support the commercialization of technologies, and help small- and mid-sized manufacturers stay on the cutting edge.
At the same time, we need to do more to help both young and experienced workers get the education and training needed for the types of jobs we want to create. Education, workforce and business leaders need to work more closely together to match curricula with needed skills and to create bridges to opportunities like apprenticeships, mentoring programs and on-the-job experiences. Without this kind of cooperative approach, the education system will keep churning out young people who will founder in an economy already full of workers who can’t get ahead.
Finally, we need to make sure that people, once they’re ready to work, can get there. We have to better align land-use, transportation and infrastructure investments with residential and business development so that it’s easier and more affordable for people to get to their jobs. And we should work to make existing public transportation systems better connect people to locations where jobs are concentrated and growing.
Greater Baltimore has the economic assets and institutional capacity needed to create a more opportunity-rich regional economy. We must build on those strengths with a bold vision of the possible, and the collective will to achieve it.
“We’re at a stage of growth in our country and around the world where cities are the vanguard of problem solving,” said Katz. “The federal government, when it functions, is a health insurance company with an army.”
“The 21st century has revalued these small geographies. That’s what the 21st century demands,” Katz said, noting that these days, “[w]e aren’t innovating in isolated business parks” in the suburbs.